NYC, Philly deals sell; munis weak

Top-rated municipal bonds were weaker at mid-session, according to traders, who saw deals from New York City and Philadelphia hit the market.

Secondary market
The yield on the 10-year benchmark muni general obligation rose one to three basis points from 1.90% on Monday, while the 30-year GO yield gained one to three basis points from 2.69%, according to a read of Municipal Market Data's triple-A scale.

Treasuries were weaker on Tuesday. The yield on the two-year Treasury gained to 1.38% from 1.36% on Friday, the 10-year Treasury yield rose to 2.31% from 2.25% and the yield on the 30-year Treasury bond increased to 2.90% from 2.83%.

On Monday, the 10-year muni to Treasury ratio was calculated at 84.4%, compared with 85.1% on Friday, while the 30-year muni to Treasury ratio stood at 95.0% versus 96.0%, according to MMD.

MSRB: Previous session's activity
The Municipal Securities Rulemaking Board reported 33,300 trades on Monday on volume of $5.29 billion.

Primary market
Bank of America Merrill Lynch held a second day of retail orders on New York City’s $820.45 million of Fiscal 2018 Series A general obligation bonds ahead of the institutional pricing on Wednesday.

On Tuesday, the bonds were priced for retail to yield from 0.90% with a 4% coupon in 2018 to 2.26% with a 5% coupon in 2028.

The deal is rated Aa2 by Moody’s Investors Service and AA by S&P Global Ratings and Fitch Ratings. All three rating agencies assign a stable outlook to the bonds.

Barclays Capital priced Philadelphia’s $175.05 million of water and wastewater bonds on Tuesday.

The issue was priced as 5s to yield from 1.24% in 2020 to 2.96% in 2034. A 2017 maturity was offered as a sealed bid.

The deal is rated A1 by Moody’s and A-plus by S&P and Fitch.

BB-072617-MUN

On Monday a pre-marketing scale for the $265.99 million of taxable portion of Port of Seattle’s $266 million of Series 2017B taxable intermediate lien revenue and refunding bonds was circulating, according to a market source.

The source said that the bonds were about 55 basis points above the comparable Treasury in 2019 and about 140 basis points above the comparable Treasury in 2032. A term bond in 2036 was about 95 basis points above the comparable Treasury. The 2017 and 2018 maturities were offered as sealed bids.

The deal is rated A1 by Moody’s, A-plus by S&P and AA-minus by Fitch.

Citigroup is set to price the other two pieces of the Port deal on Tuesday: the $17.33 million of Series 2017A bonds and $324.8 million of Series 2017C alternative minimum tax bonds.

Since 2007, the port has issued $4.15 billion of securities, with the largest issuance occurring in 2015 when it sold $739 million. It did not come to market at all in 2014.

In the competitive arena on Tuesday, Alexandria, Va., sold $99.36 million of unlimited tax general obligation capital improvement bonds in two separate sales.

BAML won the $94.93 million of Series 2017A tax-exempt GOs with a true interest cost of 2.50%. The issue was priced to yield from 0.82% with a 5% coupon in 2018 to 3.09% with a 3.25% coupon in 2037.

Wells Fargo Securities won the $4.43 million of Series 2017B taxable GOs with a TIC of 3.08%. Both deals are rated triple-A by Moody's and S&P.

JPMorgan is expected to price Belton Independent School District, Texas' $114.365 million of unlimited tax school building bonds on Tuesday. The deal is backed by the Permanent School Fund Guarantee Program and is rated triple-A by S&P and Fitch.

Bond Buyer reports 30-day visible supply
The Bond Buyer's 30-day visible supply calendar increased $148.1 million to $6.72 billion on Tuesday. The total is comprised of $2.07 billion of competitive sales and $4.65 billion of negotiated deals.

For reprint and licensing requests for this article, click here.
Primary bond market Secondary bond market City of New York, NY City of Philadelphia, PA
MORE FROM BOND BUYER